Miami real estate market goes from strength to strength, latest data shows
The real estate market in Miami, one of the most popular US locations for overseas buyers, is going from strength to strength with properties selling fast and prices increasing.
October marked more than four years of consistent monthly median sales price increases for both single family homes and condominiums, according to the latest data from the Miami Association of Realtors.
The data also shows that the median sales price for single family homes increased by 10.4% year on year from $240,000 to $265,000. However, single family home and condominium prices remain at 2004 levels despite four years of consistent year on year increases.
The median sales price for existing condominiums increased 8.1% in October to $200,000 from $185,000 a year ago. Miami-Dade County condo prices have risen in 52 of the last 53 months, a period stretching nearly four and a half years.
‘Miami real estate continues to attract international buyers from all over the world as well as a growing number of domestic consumers,’ said Christopher Zoller, the association’s residential president.
‘South Florida offers world class amenities, a top-tier arts and cultural epicentre, a diversified economy and more. The strong demand is leading to fewer days on the market for Miami single family homes while buyer offers are near asking price,’ he added.
The average percent of original list price received for single family homes was 95.6% in October 2015, an increase of 0.3% from a year earlier. The median number of days on the market for Miami single family homes decreased 7% to 40 days in October 2015 from 43 days in October 2014.
The median number of days on the market for condominiums sold in October 2015 was 59 days, a 1.7% increase from 58 days in October 2014. The average percent of original list price received was 93.8%, a 0.1% year on year increase.
Total existing Miami-Dade County residential sales, including single family and condominiums, were consistent with historical averages despite experiencing a slight decline of 5.6%, from 2,712 sales in October 2014 to 2,559 last month.
Single family home sales decreased by 4.4% year on year in October, from 1,204 to 1,151. Existing condominiums, which are competing with a significant rise in supply of new construction properties east of Interstate-95, had 6.6% fewer sales in October, decreasing from 1,508 to 1,408.
The report points out that in addition to increased sales of new construction properties, Miami existing condominiums have been impacted by a lack of access to mortgage loans. Of the 8,523 condominium buildings in Miami-Dade and Broward Counties, only 23 are approved for Federal Housing Administration loans, down from 29 earlier this year, according to statistics released earlier this year from the Florida Department of Business and Professional Regulation and FHA.
It adds that a new FHA policy, however, should qualify more South Florida condo buildings. Earlier this month the FHA announced plans to streamline the condominium recertification process, expand its definition of acceptable owner-occupied units to include second homes not owned by investors and change the way it views co-insurance clauses.
‘The new FHA policy should broaden the opportunity for South Florida families to realize the dream of homeownership, said Danielle Blake, the association’s senior vice president of government affairs and housing.
‘By increasing the number of local condo buildings approved for FHA loans, more consumers will be able to access FHA’s low down payment mortgages. Accepting citizens insurance and co-insurance clauses is another significant development, which would help more than 85% of Florida’s condo projects in complying with FHA’s insurance requirements,’ she explained.
The data also shows that in October, cash deals represented 51.5% of Miami’s total closed sales, which is more than double the national average. Cash transactions represented 55.8% of total Miami deals in October 2014. Miami’s high percentage of cash sales reflects South Florida’s ability to attract a diverse number of international home buyers, who tend to purchase properties in all cash.
Condominiums comprise a large portion of Miami’s cash purchases as 64.1% of condo closings were made in cash in October compared to 36.1% of single family home sales.
Only 23.7% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 34.9% in October 2014. Short sales and REOs accounted for 5.1% and 18.6% respectively of total Miami sales in October. Short sale transactions dropped 40.1% year on year while REOs decreased 34.7%.
At the current sales pace, there is a 5.2 month supply of Miami single family homes, a decrease of 9.3% from 5.8 months in October 2014. There is a 9.1 month supply of condominium inventory, up from 8.2 months in October 2014, an increase of 10.6%. A balanced market between buyers and sellers offers between six and nine months’ supply of inventory.
Active listings at the end of October increased 3.2% year on year, from 17,801 to 18,366. Active listings remain about 60% below 2008 levels when sales bottomed.
New listings of Miami single family homes decreased 7.6% from 2,316 in October of last year to 2,140 last month. New listings of condominiums increased 1.1% to 3,036 last month, compared to 3,003 during the same time period in 2014.